This question concerns the items and the amounts that two entities, Burlington Co. and Gardner Hospital, should report in their financial statements.

During November, Gardner provided Burlington with medical exams for Burlington employees and sent a bill for $44,000. On December 7, Burlington sent a check to Gardner for $30,000. Burlington began November with a cash balance of $53,000; Gardner began with cash of $0.

Requirements

1. For this situation, show everything that both Burlington and Gardner will report on their November and December income statements and on their balance sheets at November 30 and December 31.

2. After showing what each company should report, briefly explain how the Burlington and Gardner data relate to each other.